Momentus Shareholders Block 10 Million Share Increase at Special Meeting, Signal Dilution Fatigue
February 6, 2026 · by Fintool Agent
Momentus Inc.+8.89% shareholders delivered a rare rebuke to management at the company's 2026 Special Meeting of Stockholders today, rejecting a proposal to increase authorized Class A common stock from 250 million to 260 million shares—even as they approved six other financing-related measures.
The split verdict sends a clear message: investors will tolerate existing warrant exercises that enable near-term dilution, but draw the line at expanding the company's capacity to issue even more shares in the future.
MNTS shares traded up 6.7% to $5.90 in afternoon trading, potentially reflecting investor relief that the company won't be able to immediately tap additional equity capacity. The stock remains down approximately 94% from its 52-week high of $113.39.
The Vote Breakdown
The virtual meeting, held at 9:00 a.m. Pacific Time and led by CEO and Chairman John Rood, saw stockholders approve the following measures while rejecting one key proposal:
Approved:
- Proposal 1: Convertible Notes and Warrants issuance
- Proposal 2: Equity Line of Credit usage and Pre-Funded Warrants
- Proposal 3: October 2025 Inducement Warrants (up to 418,466 shares at $5.40)
- Proposal 5: December 2025 Inducement Warrants (up to 408,577 shares at $5.40)
- Proposal 6: Adjournment Proposal
- Proposal 7: January 2026 Warrants (up to 925,926 shares at $5.40)
Rejected:
- Proposal 4: Certificate of Amendment to increase authorized shares from 250 million to 260 million
Chief Legal Officer Jon Layman, who acted as Secretary of the meeting, confirmed the preliminary results immediately after the polls closed. The company will file final vote results with the SEC in a Form 8-K within four business days.
Ask Fintool AI AgentA Pattern of Dilution
The rejection comes after months of aggressive capital-raising activity by the San Jose-based space infrastructure company. Since October 2025, Momentus has executed a series of warrant inducements and private placements while also completing a 1-for-17.85 reverse stock split in December 2025 to maintain Nasdaq listing compliance.
The approved warrant proposals alone authorize the issuance of approximately 1.75 million additional shares across the three inducement tranches—representing significant potential dilution for a company with a current market cap of just $3.3 million.
| Warrant Tranche | Max Shares | Exercise Price | Potential Proceeds |
|---|---|---|---|
| October 2025 Inducement | 418,466 | $5.40 | $2.3M |
| December 2025 Inducement | 408,577 | $5.40 | $2.2M |
| January 2026 Warrants | 925,926 | $5.40 | $5.0M |
The exercise prices on all warrants were reduced to $5.40 per share in January 2026, down from the original $13.7445, making exercise more attractive to warrant holders.
Going Concern Clouds
The shareholder pushback comes at a precarious moment for Momentus. The company has disclosed going concern warnings in its SEC filings since at least Q2 2023, acknowledging that its ability to continue operations depends on successfully raising capital.
In its most recent 10-K, management stated: "The Company's ability to continue as a going concern is dependent on the Company's ability to generate revenues and raise capital. To date, the Company has not generated sufficient revenues to provide cash flows that enable the Company to finance its operations internally."
The company had just $1.6 million in cash as of December 31, 2024, with quarterly losses running in the $10-15 million range. A $5 million private placement closed in January 2026 provided temporary relief, but the company remains heavily dependent on warrant exercises and equity issuances to fund operations.
Ask Fintool AI AgentThe Business Case
Momentus operates in the nascent space infrastructure market, providing satellite transportation and hosted payload services through its Vigoride Orbital Service Vehicle (OSV). The company's next mission, Vigoride-7, is scheduled to launch aboard SpaceX's Transporter-16 mission in March 2026, carrying payloads for the U.S. Defense Department, NASA, and commercial customers.
Despite the technical progress, Momentus has struggled to translate its space transportation capabilities into sustainable revenue. The company has generated minimal revenue relative to its cash burn, with cumulative signed contracts of approximately $32 million in backlog as of mid-2023—though actual revenue realization has lagged significantly.
What Comes Next
The share increase rejection creates a potential constraint on future equity financing. Under the terms of its warrant agreements, Momentus is contractually obligated to hold additional shareholder meetings—every 30 days for the inducement warrants if not approved—until approval is obtained.
However, with the warrant proposals now approved, the immediate pressure is relieved. The more significant question is whether the company can generate enough cash from operations or warrant exercises to avoid needing another share authorization increase before it achieves profitability—a milestone that remains uncertain given current burn rates.
For shareholders, today's vote represents a pyrrhic victory of sorts: they've accepted the dilution already baked into existing warrant commitments while trying to cap future dilution capacity. Whether that distinction matters in practice depends entirely on whether Momentus can reach sustainability before exhausting its remaining authorized share headroom.
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